I think there is a huge market of people who wouldn't think twice of paying $1000 for, even among those who aren't really wealthy. Include me in that market. My smartphone is my most important possession, and I use it more than anything else that I own, including my laptop. With reasonably good care, a smart phone will last for 2 years, and, at that time, have 50% of its original value.

So - if a really solid smartphone was available for $1500, that is $750 over 24 months, or $31/month. There are a lot of things that I pay $31/month for, that don't give me the same value as my smartphone, that I would happily give up to get a world-class best-of-breed experience.

And realize, we are comparing with a "good enough" $400 phone - which would probably only have 25% of it's value ($100) after 2 years - so, $300/24 month or $12.50/month, so what we are really asking ourselves, is do we want to spend $12.50 for a good enough phone, or $31/month for a best-in-class phone. I'm certainly willing to pay the extra $19/month.